refrain from placing the interests of any group of unitholders above the interests of any other group of unitholders;

(3)

apply appropriate policies and procedures for preventing malpractices that might reasonably be expected to affect the stability and integrity of the market;

(4)

(a)

ensure that fair, correct and transparent pricing models and valuation systems are used for each scheme it manages, in order to comply with the duty to act in the best interests of the unitholders; and

(b)

be able to demonstrate that the investment portfolio of each such scheme it manages is accurately valued; 2

(5)

act in such a way as to prevent undue costs being charged to any such scheme it manages and its unitholders; and2

Examples of malpractices for the purposes of COLL 6.6A.2R (3) would include market timing and late trading, which may have detrimental effects on unitholders and may undermine the functioning of the market.

(2)

Examples of undue costs for the purposes of COLL 6.6A.2R (5) would include unreasonable charges and excessive trading, taking into account the scheme's investment objectives and policy.

Due diligence requirements of AFMs of UCITS schemes and EEA UCITS schemes

ensure a high level of diligence in the selection and ongoing monitoring of scheme property, in the best interests of the scheme and the integrity of the market;

(2)

ensure it has adequate knowledge and understanding of the assets in which any scheme it manages is invested;

(3)

establish written policies and procedures on due diligence and implement effective arrangements for ensuring that investment decisions on behalf of any UCITS scheme or EEA UCITS scheme it manages are carried out in compliance with the objectives and the investment strategy and risk limit system of the scheme;

(4)

when implementing its risk management policy, and where it is appropriate after taking into account the nature of a proposed investment:

(a)

formulate forecasts and analyse the investment’s impact on the portfolio composition, liquidity and risk and reward profile of the scheme before carrying out the investment; and

(b)

carry out the analysis in (a) only on the basis of reliable and up-to-date information, both in quantitative and qualitative terms;

(5)

exercise due skill, care and diligence when entering into, managing or terminating any arrangement with third parties in relation to the performance of risk management activities; and

(6)

before entering into any arrangements of the type referred to in (5):

(a)

take the necessary steps in order to verify that the third party has the ability and capacity to perform the risk management activities reliably, professionally and effectively; and

(b)

establish methods for the on-going assessment of the standard of performance of the third party.